Convergence

All theories lead to doom

We are clearly in a financial reset, but what does that mean? The term “reset” has been thrown about like mud pies since the darkest days of the Black Death (2020-2022), and everyone nods appreciatively, though I doubt seriously most folks have a firm grasp on the concept. What most folks seem to mean is that their income is shrinking relative to their expenses. So let’s take a look at the situation by returning to First Principles, shall we?

Nikolai Kondratiev (1892–1938) was a Soviet economist who, in the 1920s, developed what became known as Kondratiev Wave Theory, or long wave economics, which he defined as multi-decade cycles of boom and bust observed in capitalist economies.

His theory can best be summed up thusly:

• Economic development moves in long cycles of roughly 40 to 60 years;

• Each wave has four phases:

  1. Expansion – technological innovation, growth, rising prices;

  2. Stagnation – markets saturate, profits decline;

  3. Recession/Depression – deflation and contraction; and

  4. Recovery/Transition – new technology, new investment begins next wave.

We are given to believe that the current global economy is currently in the Recovery/Transition phase, based on the “new technology” of AI and high-speed global digital networks.

Kondratiev identified several historical waves roughly corresponding to:

• 1780s → early 1840s (Industrial Revolution)

• 1840s → 1890s (railways, steel)

• 1890s → 1940s (Electricity, chemistry)

I would extend this as:

• 1940s → 2000s (space exploitation, mass communications) N.B. the tech crash of 2000 marked the end of the last cycle.

Kondratiev linked these to technological innovation, capital investment, and price cycles. Note that he doesn’t concern himself directly with fiat currencies, a concept which falls out of an expanded interpretation of Kondratiev’s cycles.

The “72-year fiat currency cycle” that many folks associate with long-wave economics isn’t Kondratiev’s own idea. It’s a later reinterpretation by economic historians and hard-money theorists (often Austrian School or monetarist writers) who combined Kondratiev’s long-wave framework with monetary regime changes.

Here’s how that evolved:

Kondratiev’s (1925) 45–to 60-year industrial long waves are tied to technology and prices. Joseph Schumpeter (1939) linked waves to “clusters” of innovation cycles (steam, rail, electricity, digital). Modern “fiat cycle” theorists (1970s–2000s) argued that major currency systems (gold standards, fiat regimes) also follow a roughly 70– to 72-year lifespan, mirroring Kondratiev’s timing.

This model claims that fiat monetary systems — where currency is not backed by gold or silver — tend to decay and reset in a roughly 70– to 72-year intervals, corresponding to the lifespan of human financial memory and systemic debt buildup.

Here’s the core logic:

1. Inception — fiat money or monetary regime established (often after crisis or war).

2. Expansion — credit grows, confidence strong, economy booms.

3. Maturity — inflation and debt accelerate, inequality widens.

4. Decline/Reset — trust erodes, defaults, monetary reform, or return to commodity backing.

In essence, later writers grafted the Kondratiev wave pattern onto monetary history — arguing that financial regimes are subject to the same long-wave rhythm of expansion and decay.

From a completely different angle (history, philosophy), Strauss and Howe developed the Fourth Turning cycle.

The Fourth Turning theory (1991), developed by historians William Strauss and Neil Howe, argues that Anglo-American history moves in recurring 80- to 90-year cycles—called saecula—each divided into four “turnings” that correspond to generational archetypes. The sequence runs from a High (social unity after a crisis), to an Awakening (spiritual and cultural rebellion), to an Unraveling (individualism and institutional decay), and finally a Crisis, the Fourth Turning, when society faces an existential upheaval — war, revolution, or systemic collapse — that destroys old institutions and clears the way for renewal. In short, history repeats not linearly but cyclically, as generations recreate the same pattern of rise, decay, and rebirth.

Interestingly, all three theories have converged on our current time. Though the languages differ — Marxist data cycles (Kondratiev), Austrian monetary ethics, and Strauss–Howe’s generational archetypes — they all describe cyclic entropy — a period of creative expansion leads inevitably to excess, then collapse, and finally regeneration.

• Kondratiev saw this as structural to capitalism.

• Austrians saw it as policy-induced.

• Strauss–Howe saw it as human and cultural.

In practice, they tend to stack rather neatly:

• Generations raised in prosperity fund speculative booms →

• Central banks reinforce them →

• Technological and demographic limits cap returns →

• A crisis purges the system →

• A new saeculum begins.

I am of the firm opinion that the various “leader” classes understand the eternal cycles and know very well when economies and societies are building and decaying, and they manage these cycles to their profit. It seems to me that all the major events of the last 25 years have been putting the pieces in place to manage and control the collapse, so that “their” systems are in place when the next cycle begins.

If we really want to change things and empower all of humanity, we have to develop the long memories that “they” have. We need to disrupt “their” ability to control the rebuilding part of the cycle, so that “they” can’t get “their” systems in place when the next boom comes. Unfortunately, the vast majority of humans have zero memory and when the crash begins, they flock to anyone or anything offering “security” and continuity.

This is why you never attempt to rescue a drowning person yourself, but rather throw flotation devices to them, lest they drag you down with them as they flail and panic.

We are in the Great Reset, that part is unavoidable in any circumstance. The choice we have is what will succeed the current regime: will we allow the same thugs to take control yet again, or recognize “their” scam and seek alternatives?

I know what I hope for, and I know what I expect.

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There is one great film that beautifully and thoroughly encapsulates today’s theme of cycles: Being There (1979), featuring a haunting final performance by an incredibly talented actor, Peter Sellers. Based on the outstanding novel by Jerzy Kosinski, the character of Chauncy Gardener is the embodiment of eternal cycles, and his message resonates with a mass audience, though Chauncy himself has no clue about the profundity of his insights. A fantastic film with an amazing performance, and a light touch by director Hal Ashby, allowing the story and characters to breathe.

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